Regulator to see if Ratanpur Steel can return to production

The stock market watchdog has decided to find out if Ratanpur Steel Re-Rolling Mills (RSRMSTEEL) has enough resources to return to business, prompted by its closure for years and non-submission of financial statements.

The Bangladesh Securities and Exchange Commission (BSEC) deployed three officials to conduct the investigation.

The company has remained shut since 2020 for what it claimed is a working capital shortage. It also blamed power supply disruptions and lack of raw materials for the suspension of its operations.

However, even if production remains halted, it is mandatory for all listed companies to publish quarterly and yearly financial statements.

The probe committee will dig up why the steel maker has not filed any financial statement since 2021.

An inquiry order in this regard was issued by the market watchdog last month.

The committee will see if the steel maker has misused money borrowed from banks and raised by floating shares to the public (through initial public offering). Investigators have also been tasked with finding out if the company committed embezzlement of funds and money laundering.

RSRMSTEEL listed in the capital market in 2014 by raising Tk 1 billion from primay market. A concern of the Chattogram-based Ratanpur Group, it has been reported to have defaulted on loans.

Now, the organisation's assets and liabilities will be assessed to determine if it is capable of resuming operations.

The committee comprising Md. Shahnows, deputy director of the BSEC; Mahmudur Rahman, assistant director of the BSEC, and Farhana Waleja, assistant director of the BSEC, will examine evidence available to determine if the top management and the board of directors had been involved in breach of securities laws.

As many as 25 cases have so far been filed against RSRM Group over default on loans worth Tk 25 billion taken from 10 banks and other financial institutions.

The investigation committee will evaluate revenue, cost of goods sold, net income, inventories, and other crucial components to decide if those were overstated or understated in the last financial statement submitted by the company.

Earlier in 2023, the securities commission appointed independent directors to help the company regain its business but to no avail.

The probe committee has been instructed to complete its investigation and submit a report to the Commission within 60 working days from May 24, the day the inquiry order was issued.

Meanwhile, the stock of the company closed at Tk 8.7 per share on Tuesday on the Dhaka Stock Exchange, 3.49 per cent up from the previous day.

farhan.fardaus@gmail.com